Number and algebra

8
Earning
money
An Australian person working full-time works an average of
39.9 hours per week. According to the 2011 Census, the
median weekly income was $577 for individuals and $1481
for families. How much does your family earn each week?
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n Chapter outline n Wordbank
Proficiency strands allowable deduction A part of a persons yearly income
8-01 Wages and salaries U F PS C that is not taxed, such as work-related expenses and
8-02 Overtime pay U F PS R C donations to charities
8-03 Commission, piecework annual leave loading Extra payment to a worker based
and leave loading U F PS C on 17.5% of 4 weeks annual leave
8-04 Income tax U F C income tax A tax paid to the government based on the
8-05 PAYG tax and net pay U F C size of a persons income
net pay Pay received after deductions from gross pay;
Note: This Stage 5 (Years 910) topic of the NSW syllabus
take-home pay
is not part of the Australian curriculum.
overtime Time worked beyond normal working hours,
such as at night or on weekends, at a higher rate of pay
time-and-a-half Overtime pay that is calculated at 1.5
times the normal pay rate
salary A fixed yearly amount of money that is paid weekly,
fortnightly or monthly, not dependent on the number of
hours worked
wage An amount of money paid to people for work,
calculated on the number of hours worked

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n In this chapter you will:

calculate wages, salaries, overtime, commission and piecework
calculate weekly, fortnightly, monthly and yearly incomes
calculate annual leave loading
use tables to calculate income tax and PAYG tax
calculate net pay from gross pay

SkillCheck
Worksheet
1 Write 8.2% as a decimal.
StartUp assignment 8

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2 Find 15% of $15.
3 How many:
Worksheet
a days in one year? b weeks in one year?
Time and money
calculations c days in 4 weeks? d months in 3 years?
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e days in a fortnight? f weeks in a quarter of a year?
g months in 5 years? h fortnights in one year?
4 Round each amount to the nearest cent.
a $7.6831 b $21.4209 c $524.7373
d $92.3557 e $3085.6382 f $106.3446
5 Evaluate (correct to the nearest cent where necessary):
a 38 3 $12.87 3 1.5 b $75 430 4 12 c 0.42 3 $7500
d 0.13 3 $9217 e $4758 3 0.073 3 2 f 0.47 3 $31 726
g $69 870 4 52.18 h $2150 3 1.09 i $3276 3 0.175 3 4
6 Evaluate $4650 0.3 3 ($43 210  $37 000).

NSW
8-01 Wages and salaries
Worksheet
People who work usually earn a wage or a salary.
Wages and salaries
A wage is calculated by the number of hours worked
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and is usually paid weekly. People such as supermarket
cashiers, electricians and gardeners earn a wage. Wage
earners can earn more income by working extra hours
(overtime).
Fairfax/Virginia Star

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A salary is a fixed annual amount, paid weekly, fortnightly or monthly. People such as architects,
software designers and the police earn a salary. Salary earners do not earn overtime pay but can
receive benefits such as a company car, expense account, shares in the company or paid medical
expenses.

Example 1
Tims first job pays him $15.76 per hour. If he works 38 hours each week, calculate his
weekly income.

Solution
Weekly income 38 3 $15:76
$598:88

Summary
1 year 12 months
1 fortnight 2 weeks
1 year 52 weeks for wage earners
1 year 52.18 weeks for salary earners
To convert a salary to a weekly amount, divide by 52.18 because 1 year 365 14 days
365 14 4 7 weeks  52:18 weeks.

Example 2
Leanne earns a salary of $62 400 p.a. How much
per annum (p.a.) per year
(correct to the nearest cent) does she earn:
a each week? b each fortnight? c each month?

Solution
a Weekly income $62 400 4 52:18
$1195:8604 . . .
 $1195:86
b Fortnightly income 2 3 $1195:86 1 fortnight 2 weeks
$2391:72
c Monthly income $62 400 4 12 1 year 12 months
$5200

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Example 3
Sarah earns a salary of $54 706 and works 38 hours per week. Anh earns $982 per week for
working 37 hours. Who has the higher hourly rate of pay?

Solution
Sarahs hourly pay rate $54 706 4 52:18 4 38
$27:5897 . . .
 $27:59
Anhs hourly pay rate $982 4 37
$26:5405 . . .
 $26:54
Sarah has the higher hourly rate of pay.

Exercise 8-01 Wages and salaries

Express all answers correct to the nearest cent where necessary.
See Example 1 1 Find the weekly wage for each of the following workers.
a Alex, who earns $16.24 per hour and works for 40 hours.
b Brianna, who earns $24.60 per hour and works for 38.5 hours.
c Chris, who works 8 hours a day, Monday to Friday, and is paid $18.38 per hour.
d Lionel, who works Monday to Wednesday, 6 hours per day, and is paid $15.85 per hour.
2 What is Chloes annual salary if she earns $879 per week?
3 If Sunil earns $3672 per month, what is his annual salary? Select A, B, C or D.
A $95 472 B $88 128 C $36 720 D $44 064
4 Rhys earns $2083.74 per fortnight. How much does he earn in a year?
See Example 2 5 Mr Kelly earns a salary of $68 340 p.a. How much does he earn:
a each week? b each fortnight? c each month?
6 Mitchell earns $11.40 per hour before midnight and $13.75 per hour after midnight for each
shift. Calculate his income for working each of these shifts:
a 7:00 p.m. to 3:00 a.m. b 9:00 p.m. to 5:30 a.m. c 10:30 p.m. to 6:00 a.m.
7 Dana earns $8.47 an hour and works for 38 hours each week. Darren earns $9.16 per hour for
his 35 hours of work. Who earns more per week and by how much?
See Example 3 8 Abdul considers two jobs, one with a salary of $47 640 p.a. and the other with a fortnightly
income of $1865. Calculate the weekly income for each job to determine which pays more.
9 Who earns the higher hourly rate of pay for each pair of workers, and by how much?
a Mitch worked 40 hours for $584 pay.
Marisol worked 38 hours for $501.60 pay.
b Philip worked 30 hours for $441 pay.
Paula worked 27 hours for $384.75 pay.

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c Faith worked Monday to Friday, 8.5 hours per day, for $892.50 pay.
Fabian worked Monday to Thursday, 9 hours per day, for $615.60 pay.
d Ranjan earned $62 760 p.a., working 9:00 a.m. to 5:30 p.m., five days per week.
Rhonda earned $68 620 p.a., working 6:00 a.m. to 6:00 p.m., Monday to Thursday.
10 A printer earns $22 per hour, working from 8:00 a.m. to 4:30 p.m., Monday to Friday.
Find how much he earns:
a each day b each week c each month.
11 Ziad earns $8640 per month. Calculate his:
a annual salary b weekly income
12 Parker earns a salary of $38 720 p.a. and works 42 hours per week. Find how much Parker
earns:
a per month b per week c per hour
13 Liam works 9 hours per day from Tuesday to Friday. He is paid $17.48 per hour. He also
works on Saturday for 6 hours at a special rate of $19.12 per hour. How much did Liam earn
for the week?
14 Charlie works from 7:30 a.m. to 3:00 p.m. Monday to Wednesday and from 8:00 a.m. to
4:00 p.m. Thursday and Friday. His hourly pay rate is $16.38. Calculate Charlies weekly wage.
15 Ross packs shelves at a supermarket and is paid Worked solutions
$9.65 per hour on weekdays and $11.60 per hour Wages and salaries
on Saturdays. He worked the following hours last
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week.
Day Hours Worked
Monday 6:30 a.m. 2:00 pm
Tuesday 8:00 a.m. 4:00 p.m.
Wednesday 11:00 a.m. 4:30 p.m.
Friday 9:30 a.m. 3:30 p.m.
Saturday 10:00 a.m. 4:00 p.m.
What was Rosss total income for the week?
Alamy/ Radius Images

16 Jack is a cafe manager and works the following

hours in a week.
Day Hours Worked
Monday 6:30 a.m. 2:30 p.m.
Tuesday 7:00 a.m. 4:00 p.m.
Thursday 11:30 a.m. 8:30 p.m.
Friday 7:30 a.m. 3:30 p.m.
Saturday 10:30 a.m. 5:00 p.m.
He is paid at the following rates.
Day Rate of pay
Monday to Friday $10.22 per hour
Thursday after 4:00 p.m. and all day Saturday $15.35 per hour
What is Jacks total income for the week?

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17 Andrew works from 8:00 a.m. to 4:00 p.m. from Monday to Wednesday and from 7:30 a.m. to
5:30 p.m. on Thursday and Friday. If his weekly wage is $847, find his hourly rate of pay.
Worked solutions 18 Rathas monthly income is $5600. Convert this amount to a fortnightly income.
Wages and salaries

MAT09NAWS10036
Investigation: Positions vacant
1 a Find five job advertisements from a newspaper or employment website.
b For each advertisement, write:
a brief job description and whether the job is full-time or part-time, permanent or
casual
whether a salary or wage is paid, and how much
whether there are any other payments, incentives, or benefits that may come with
the job.
2 This job advertisement is for a courier.

COURIERS
Full-time Permanent Positions
Baulkham Hills, Lidcombe, Pymble, Five Dock, Wahroonga, Dural and Hornsby
Part-time Permanent Positions
Parramatta 21 hours per week; shifts start at approximately 6:30am
Wetherill Park 20 hours per week; shifts start at approximately 7:30am
Fixed-term Positions
PART-TIME
Regents Park until 14 June 2015; 20 hours per week; shifts start at
approximately 6:00am
Parramatta until 10 June 2015; 24 hours per week; shifts start at
approximately 6:30am
FULL-TIME
Regents Park until 10 August 2015
Beverly Hills until 19 June 2015
Camperdown
Blacktown until 22 October 2015
Lane Cove until 31 May 2015
All full-time positions are from Monday to Friday, 36.75 hours per week.
Shifts start at approximately 6:00am.

Essential Conditions/Requirements:
Must hold a current unrestricted motorcycle licence

a How many hours would a full-time permanent employee be expected to work in a

week?
b Explain what a fixed-term position is.
c The advertisement does not give wage rates. Can you give a reason for this?

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3 According to this advertisement, how much would a glass-cutter earn in one year if he is
expected to work 35 hours per week?

Glasscutters
$27 p/h

Exp. Cutters req. in Gladstone for immediate start. Must be able

to cut up to 10 mm, be familiar with cutting machinery and have a
minimum 2 years exp.

NSW
8-02 Overtime pay
Wage earners receive overtime pay when they work more than their standard number of hours.

Summary
The two most common rates of overtime pay are:
time-and-a-half 1.5 3 normal hourly rate
double time 2 3 normal hourly rate

Example 4
Siki works 35 hours at $12.74 per hour and 4 hours overtime at time-and-a-half. Calculate
his total earnings.

Solution
Normal pay 35 3 $12.74 $445.90
Overtime pay 4 3 $12.74 3 1.5 $76.44
Total earnings $445.90 $76.44 $522.34
Alternative method:
Equivalent number of normal hours 35 4 3 1:5
41
Total earnings 41 3 $12:74
$522:34

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Example 5
Charlotte earns time-and-a-half on Saturdays and double time on Sundays. She works
38 hours from Monday to Friday, 6 hours on Saturday and 4 hours on Sunday. Calculate
Charlottes total earnings if her normal rate of pay is $14.50 per hour.

Solution
Normal pay (Monday to Friday) 38 3 $14:50
$551
Saturday pay 6 3 $14:50 3 1:5
$130:50
Sunday pay 4 3 $14:50 3 2
$116
Total pay $551 $130:50 $116
$797:50

Example 6
Peter and Vinh are cadet
hamburger chefs. Last week,
Peter worked for 40 hours and
Vinh worked for 43 hours.
Calculate their respective total
earnings based on the following

Shutterstock.com/stockcreations
award.

Award for cadet hamburger chefs

Normal rate $12.80 per hour
Normal rate For first 38 hours worked
Time-and-a-half For the next 3 hours
Double time For each additional hour after that

Solution
For Peter (40 hours):
Normal pay 38 3 $12:80 First 38 hours.
$486:40

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Time-and-a-half pay 2 3 $12:80 3 1:5 Remaining 2 hours.
$38:40
Total earnings $486:40 $38:40
$524:80
For Vinh (43 hours):
Normal pay $486.40 First 38 hours.
Time-and-a-half pay 3 3 $12:80 3 1:5 Next 3 hours.
$57:60
Double time pay 2 3 $12:80 3 2 Remaining 2 hours.
$51:20
Total earnings $486:40 $57:60 $51:20
$595:20

Example 7
Last week Rani worked her normal 38 hours, then 4 hours at time-and-a-half and 5 hours at
double time. She was paid $909.90 for the week. Find her hourly rate of pay.

Solution
Equivalent number of normal hours 38 4 3 1:5 5 3 2
54
Hourly rate of pay $909:90 4 54
$16:85

Exercise 8-02 Overtime pay

1 The hourly rate of pay for workers in a factory is $17.65. Calculate the total earnings for See Example 4
each employee.
a Soo-jin works 28 hours at normal rates.
b Jemima works 33.5 hours at normal rates.
c Ethan works 38 hours at normal rates and 3 hours at time-and-a-half.
d Stavros works 35 hours at normal rates and 5.5 hours at time-and-a-half.
e Lana works 37 hours at normal rates, 6 hours at time-and-a-half and 4 hours at
double-time.
f Marco works 40 hours at normal rates, 5 hours at time-and-a-half and 4 hours at
double-time.
2 Pavel works 20 hours at normal rates with an hourly pay rate of $18.45 per hour and 4 hours at
time-and-a-half. Which calculation could be used to find his weekly wage? Select A, B, C or D.
A $18.45 3 24 B $18.45 3 20 $8.45 3 24 3 1.5
C $18.45 3 20 $18.45 3 4 3 1.5 D $18.45 3 24 3 1.5

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3 Josie works 38 hours at $14.67 per hour and 3 hours overtime at time-and-a-half. Calculate her
total earnings.
4 Wayne is a store assistant manager who
works 40 hours at $17.23 per hour, 5
hours overtime at time-and-a-half and
3.5 hours double-time. Calculate his
total earnings.

Alamy/ keith morris

See Example 5 5 Pancake House pays employees normal rates for Monday to Friday, time-and-a-half for
Saturday and double-time for Sunday. Mia works 36 hours Monday to Friday, 5.5 hours on
Saturday and 4 hours on Sunday. Calculate her total earnings if her normal rate of pay is
$15.40 per hour.
6 Anu works at a mobile phone store. She is paid normal rates for shifts worked on Monday
to Friday, time-and-a-half for Thursday nights from 5 p.m. onwards, and double-time on
Saturdays. In a single week, Anu worked 37 normal hours and on Thursday she worked till
8:00 p.m. On Saturday, she worked from 9:30 a.m. until 2:30 p.m. If her normal pay rate is
$13.74 per hour, what is Anus total wage for the week?
7 Holly works from 9:00 a.m. until 4:00 p.m. each day on Monday, Tuesday and Wednesday at
a normal rate of $11.60 per hour. She works Thursday nights from 3:30 p.m. to 8:30 p.m. at
time-and-a-half and Sundays from 8:00 a.m. until 4:00 p.m. at double-time. Which of the
following calculations could be used to calculate her weekly wage? Select A, B, C or D.
A $11.60 3 34 11.60 3 1.5 3 4 11.60 3 12 3 2
B $11.60 3 21 11.60 3 1.5 3 5 11.60 3 8 3 2
C $11.60 3 7 11.60 3 1.5 3 6 11.60 3 8 3 2
D $11.60 3 (13 1.5 3 11 2 3 12)
See Example 6 8 Elegant Jewellery pays employees at the following rates.
Weekly Award
Normal rate $15.70/h
Normal For the first 35 hours
Time-and-a-half For the next 5 hours
Double-time For each hour after that
Use the information above to calculate the weekly wages for each employee listed below.
a Lionel, who works 33 hours b Tashi, who works 36 hours
c Kylie, who works 40 hours d Mannix, who works 44.5 hours
e Noah, who works 38.5 hours f Jennifer, who works 42 hours

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9 Nuts and bolts machinists enterprise agreement
Normal rate Applies Monday to Friday
Time-and-a-half For any hours worked on Saturday
Double time For any hours worked on Sunday
Use the table above to calculate the total earnings for each employee below.
Hours worked
Name Hourly rate MonFri Sat Sun
a Alan Douglas $9.60 36 4 8
b Ava Hawkes $23.30 38 0 6
c Seetha Mehta $18.60 38 4 2.5
d Tarek Mifsud $20.00 40 8 0
e Ivan Vitsic $30.00 34 4 6
f John Hackett $16.40 36 4.5 6
10 Calculate the normal hourly rate of pay for each person. See Example 7
a Sarah earns $862.40 by working 36 hours at normal rates and 4 hours at double time.
b Fiona earns $969.60 by working 37 hours at normal rates, 3 hours at time-and-a-half and Worked solutions

4 hours at double time. Overtime pay

c Thierry earns $240 by working 6 hours at normal rates and 4 hours at double time. MAT09NAWS10037

d Sana earns $163.80 by working 4 hours at time-and-a-half and 3 hours at double time.
e Phillip earns $727.60 by working 30 hours at normal rates, 5 hours at time-and-a-half and
3 hours at double time.
f Tara earns $76.50 by working 7 hours at normal rates and 1.5 hours at time-and-a-half.

Technology Calculating incomes

In this activity, we will use a spreadsheet to calculate the incomes of employees at J-mart
department store. The award for all workers is as follows.
Normal rate for up to 36 hours worked
Time-and-a-half for the next 4 hours worked
Double-time for any hours worked after that
1 Create a spreadsheet as shown below, then for each employee enter the correct number of
hours for columns D, E and F.

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2 In cell G1, enter the heading Total Pay.

3 To calculate R Jones total pay, enter in cell G2 the formula 5B2*D2B2*1.5*E2B2*2*F2
4 Fill Down the formula from G2 to G9. Use Format Cells to change the values in column G to
Currency.

Just for the record Labour Day holiday

Each year, Australians have a public holiday on Monday
called Labour Day or Eight-hours Day. This day celebrates
the significant improvement of wages and working
conditions in the 19th century.
In the early 1800s, the typical Australian worker was
working up to 14 hours per day, six days per week, often
under difficult conditions. Sick leave or holidays did not
exist, and employees could be sacked immediately without
reason.
In 1856, Victorian workers won the right to limit their
working time to eight hours per day. This was a world
first, allowing workers more time in the day for recreation,

 www.cooeepictures.com
reading, education and family, dividing the day into 8
hours labour, 8 hours recreation, 8 hours rest (sleep). The
Eight-hour Day was adopted in all Australian states by the
1920s. There is an Eight Hour monument that stands in
central Melbourne with the numbers 888 featured at
the top.
Labour Day is celebrated on a different day for each state of Australia. Find out when
Labour Day is celebrated in each state.

NSW
Commission, piecework and
Worksheet
8-03 leave loading
Earning money

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Some workers are not paid by the amount of time they work, but by the number of items they
Worksheet make or process.
Percentages without
calculators

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Commission
Commission is earned by salespeople or agents of a business or company. It is calculated as a
Homework sheet
percentage of the value of items sold or income made. A fixed amount called a retainer may also
Earning money be paid. Real estate agents and actors agents earn a commission.
MAT09NAHS10004

Skillsheet

Percentage
calculations

MAT09NASS10026

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Example 8
Nathan sells cars and is paid a weekly retainer of $260 plus 3.5% of the value of the cars he
sells. Calculate his income if he sells cars worth a total of $98 000 this week.

iStockphoto/kali9
Solution
Nathans income $260 3:5% 3 $98 000
$3690

Example 9
Corrina is a real estate agent and is paid according to the following commission rates.
2% on the first $100 000 of property sold
1.5% on any value thereafter.
Calculate Corrinas commission for selling an apartment for $380 000.

Solution
Commission on 1st $100 000 2% 3 $100 000
$2000
Remaining amount $380 000  $100 000
$280 000
Commission on remaining amount 1:5% 3 280 000
$4200
Corrinas commission $2000 $4200
$6200

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Piecework
Piecework is earned according to the number of items made or tasks completed. Fruit pickers and
dressmakers earn money this way.

Example 10
Sue earns $245 for each garden she designs. How many gardens must Sue design to earn
over $50 000?

Solution
Number of gardens $50 000 4 245
204:081 . . .
 204 Rounding down.
Sue must design at least 204 gardens to earn over $50 000.

Bonus
A bonus is extra money paid to employees who produce work of high quality or quantity, or for
meeting an important goal or deadline. Some businesses reward their employees with a Christmas
bonus for a productive years work.

Example 11
After a successful year, a software company gave each employee a 2.5% bonus on their
annual income. Find:
a the bonus received by Shaina, who earns $1426.50 per week
b the annual income of Kahil, whose bonus amounted to $1175.

Solution
a Shainas annual income 52 3 $1426:50
$74 178
Shainas bonus 2:5% of $74 178
$1854:45
b 2:5% of Kahils income $1175
1% of Kahils income $1175 4 2:5 Using the unitary method.
$470
) Kahils annual income $470 3 100 100%
$47 000

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Annual leave loading
Annual leave loading or holiday loading is extra pay given during annual leave (holidays). It is paid
at the rate of 17.5% of four weeks normal pay.

Example 12
For her Christmas holidays, Katrina received 4 weeks normal pay plus 17.5% annual leave
loading for the 4 weeks. If Katrinas annual salary is $51 840, find:
a her normal weekly pay
b her leave loading
c her total pay for the four-week holiday.

Solution
a Weekly income $51 840 4 52:18
$993:484 09 . . .
 $993:48
b Leave loading 17:5% 3 $993:48 3 4
$695:436
 $695:44
c Total holiday pay 4 3 $993:48 $695:44
$4669:36

Exercise 8-03 Commission, piecework and leave loading

1 Anita is paid a commission of 3% on the value of kitchenware she sells. How much will Anita See Example 8
earn if she sells goods to the value of $18 600 in one week?
2 Dan is paid a commission of 4.5% of the value of the in excess of means to go over
book sales he makes in excess of $5000. In one week or above
Dan sells books to the value of $37 427. Calculate his
income for that week.
3 A real estate agent is paid a monthly retainer of $800 and a commission of 1.5% of the value
of properties sold. Her sales in January were $678 600. Calculate her income for January.
4 Consider these two salespeople and their method of payment.
Perry: $250 retainer and 4.5% of the value of goods sold.
Amy: no retainer and 7.5% of the value of goods sold.
Calculate the income earned by Perry and Amy if they each sell goods worth $30 000.

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5 Lara earns 5% commission on the sale of thoroughbred horses. Last year she sold horses
worth $1 640 000. Calculate Laras commission last year.

Shutterstock.com/anakondasp
See Example 9 6 A real estate agency pays the following rates of commission.
5% on the first $100 000
3% on the next $50 000
2% on any value thereafter.
Calculate the commission earned by selling property valued at:
a $240 000 b $316 000 c $395 000
7 Xanthe is paid 5% of the value of used cars she sells and 3.5% of the value of new cars. What
commission is earned by selling new cars worth $78 400 and used cars worth $36 200?
8 Calculate the income for each amount of piecework.
a assembling 390 boxes at 42 cents per box
b delivering 900 pamphlets at 10 cents per pamphlet
c assembling 93 prams at $1.85 per pram
d polishing 16 cars at $11.75 per car
e mowing nine lawns at $34.20 per lawn
f hemming 320 pairs of trousers at 68 cents per pair
g polishing 108 shoes at $1.50 per shoe
h laying 64 m2 of paving at $24.50 per m2
See Example 10 9 Fiona earns 85 cents for each toy she
assembles.
a How much does she earn for assembling:
Shutterstock.com/Verdateo

i 146 toys? ii 203 toys?

b Last week Fiona earned $459.
How many toys did she assemble?
c Find the number of toys Fiona
must assemble to earn (at least)
the following amounts:
i $200 ii $620

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10 Ricky earns $9.80 for each car he washes. Calculate his income if he washes 16 cars.
11 A process worker is paid 28 cents per article assembled, for up to 500 articles, then 35 cents
per article assembled after that. Calculate the total income earned for assembling each of the
following numbers of articles.
a 346 b 506 c 1406
12 Kevin works at the SuperGlo Hand Car Wash. He earns $3.50 per car for a wash only and
$9.50 per car for a wash and polish. His job sheet for last week is given below.
Wash only Wash and polish
Day (number of cars) (number of cars)
Monday 11 4
Tuesday 12 8
Wednesday 7 10
Thursday 16 3
Friday 18 13
Saturday 10 12
Calculate:
a Kevins total earnings for the week
b Kevins average daily earnings
c Kevins average hourly rate of pay if he worked for 8.5 hours each day. (Write your answer
to the nearest ten cents.)
13 A publishing house gives all employees a 4.75% annual bonus for a profitable year. Calculate See Example 11
the annual bonus for each of these incomes.
a $42 400 p.a. b $65 600 p.a. c $1095 per week
d $794 per week e $6750 per month f $3156 per fortnight
14 Zlatko, a construction supervisor, has signed a contract worth $87 000 to ensure that a factory
is built by June 30. He will receive a bonus of 1.5% of his contract for each day the job is
completed ahead of time. How much will Zlatko earn if the factory is completed on June 22?
15 Frank works 40 hours a week and is paid $13.40 per hour. Calculate: See Example 12
a Franks weekly income
b the annual leave loading of 17.5% on 4 weeks pay
c Franks total pay for the four-week holiday.
16 Astra is the manager of a computer megastore. Her salary is $62 000 p.a. Calculate:
a Astras fortnightly pay
b the holiday loading Astra would receive when she takes her 4 weeks annual leave
c her total holiday pay.
17 Jamie, a storeman, works from 8:00 a.m. to 4:00 p.m., Monday to Friday. Jamies rate of pay is
$15.80 per hour. Calculate:
a Jamies weekly wage
b Jamies holiday pay for 4 weeks (including leave loading).

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NSW
8-04 Income tax
Worksheet
Anyone who earns more than $18 200 in a
Income tax tables
financial year (1st July to 30th June the
MAT09NAWK10092
following year) must pay income tax to the
Worksheet federal government. Income includes money
Tax return form
earned from a job or interest earned from bank
accounts. The government uses the money paid
MAT09NAWK10093
in tax to fund public services such as schools,

Shutterstock.com/Rob Hainer
hospitals, roads and the defence forces.

Not all of a persons income is taxed. If we use

some of our income for work-related expenses
or to donate money to charities, these amounts
are called allowable deductions (or tax deductions) and are not taxed. Other examples of
allowable deductions are tools of trade, uniforms, car-related expenses, subscriptions to
professional organisations and journals.

Summary
Income tax is calculated on a persons taxable income, which is the gross income (total
earnings) less all allowable deductions, rounded down to the nearest dollar.
Taxable income gross income  allowable deductions

The more a person earns, the higher the rate of tax to be paid. The table below shows how income
tax is calculated.

Tax rates for Australian residents

Taxable income Tax on this income
0 $18 200 Nil
$18 201 $37 000 19c for each $1 over $18 200
$37 001 $80 000 $3 572 plus 32.5c for each $1 over $37 000
$80 001 $180 000 $17 547 plus 37c for each $1 over $80 000
$180 001 and over $54 547 plus 45c for each $1 over $180 000
Source: Australian Taxation Office for the Commonwealth of Australia

Example 13
Mrs Henry earned $35 660 last financial year and has allowable deductions of $727 in
work-related car expenses and $259 in donations to charities.
a Calculate her taxable income.
b Use the tax table to calculate the income tax Mrs Henry must pay.

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Solution
a Taxable income $35 660  $727  $259
$34 674
b According to the table, a taxable income of $34 674 is in the $18 201  $37 000 tax
bracket.
Income tax 0:19 3 $34 674  $18 200 19c for each $1 means 19%
$3130:06 or 0.19

Example 14
Alice is an accountant who earned $78 642 one financial year. She also earned $132.51 in
interest from her bank savings. Alice has allowable deductions of $287.20 for office supplies
and $75.88 in books. Calculate:
a Alices taxable income
b the amount of income tax payable

Solution
a Taxable income $78 642 $132:51  $287:20  $75:88
$78 411:43
 $78 411 Rounded down to the nearest dollar.
b According to the table, a taxable income of $78 411 is in the $37 001  $80 000 tax
bracket.
Tax payable $3572 0:325 3 $78 411  $37 000
$17 030:575
 $17 030:58

Exercise 8-04 Income tax

1 Jake works as a plumber and earned $73 219 this year. He is entitled to these deductions: tools
$527.40, training courses $735.26 and office supplies $321.55. What is Jakes taxable income,
rounded down to the nearest dollar?
2 Raina earns $35 660 in a year and has allowable deductions of $986.40. See Example 13
a Calculate her taxable income, rounded down to the nearest dollar.
b Use the tax table to calculate the income tax Raina must pay.
3 Ali had a yearly income of $90 157 and earned $240 in dividends from his shares. He also See Example 14
had allowable deductions of $540 for car expenses and $332 in the depreciation of his
photocopier. Calculate:
a Alis taxable income b the amount of tax payable.

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4 Kadin earns $2145 per fortnight and has allowable annual deductions of $337. Calculate his
income tax for the financial year. Select A, B, C or D.
A $3412.40 B $6824.60 C $9562.73 D $12 519.90
5 Matthew is a diving instructor and earns
$57 300 per year. He has allowable
deductions of $1126 for diving
equipment and $912 for a wetsuit.
Calculate:
a his taxable income
b his income tax.

Shutterstock.com/Specta
6 Rebecca earns $1756.55 per week and claims deductions of $455.30 in travel expenses, $276
depreciation of computer equipment and $135.85 membership to a professional association.
She also donated $30 each month to a charity. Calculate Rebeccas:
a gross annual income b taxable income c income tax payable
7 Joshua is a swimming pool manager with a yearly income of $45 958. He also earned $127.50
in interest from his bank savings account. Joshua also had allowable deductions of $134 and
$55 in donations to charity. Calculate:
a Joshuas taxable income b the amount of tax payable
8 Addison is a casual dance teacher who earns $20.08 per hour. She works 18 hours a week for
34 weeks of the year. How much should she pay in income tax? Select A, B, C or D.
A no tax paid B $1123.10 C $2420.87 D $4693.31
9 Sefu earns $69 160 p.a. His allowable deductions are donations to charity of $45, uniforms
costing $495 and car-related work expenses worth $890. Calculate the income tax payable.
10 Eerin earns $2346.87 per fortnight and claims deductions of $1955.30 in travel expenses, $572
depreciation of camera equipment, $180.20 membership to a professional association and
$150 donated to a charity. Calculate Eerins income tax payable.

Technology Online income tax calculators

The Australian Taxation Office (ATO) website www.ato.gov.au has an online calculator for
income tax. Visit the website and search Simple Tax Calculator to find the income tax calculator
for individuals.
1 Enter the taxable income $63 000 as 63000 (no spaces).
2 Select the current financial year.
3 Select Resident for full year and click Next.
4 The estimated tax payable will be shown on a new screen.
Repeat for at least two more taxable incomes. Compare the amount of tax payable with the results
of other students in your class.

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Mental skills 8 Maths without calculators

Percentage increase and decrease

The fraction equivalents of commonly-used percentages can help us when we need to
increase or decrease a number by a percentage.
Percentage 1% 5% 10% 12 12 % 20% 25% 33 13 % 50%
1 1 1 1 1 1 1 1
Fraction
100 20 10 8 5 4 3 2
1 Study each example.
a Increase 360 by 25%.
1
25% of 360 3 360
4
360 4 4
90
360 90 450

b Increase $80 by 5%.

1
5% of $80 3 $80 or 10% of $80 $8
20
) 5% of $80 $8 4 2
$80 4 20
$4
$4
$80 $4 $84
2 Now increase:
a $340 by 20% b 66 by 50% c 150 by 33 13 % d $400 by 1%
e 640 by 5% f $72 by 12 12 % g $470 by 10% h 180 by 25%
i 420 by 33 13 % j $80 by 5% k $280 by 25% l 70 by 20%
3 Study each example.
a Decrease $225 by 33 13 %. b Decrease $70 by 15%.
1 1 1
33 % of $225 3 $225 10% of $70 3 $70 $7
3 3 10
$225 4 3 1
) 5% of $70 3 $7 $3:50
$75 2
) 15% of $70 10% 3 $70 5% 3 $70
$7 $3:50
$10:50
$225  $75 $150 $70  $10.50 $59.50
4 Now decrease:
a 440 by 25% b $300 by 20% c 2400 by 33 13 % d $500 by 15%
e $250 by 10% f $120 by 50% g $72 by 12 12 % h 80 by 5%
i $85 by 20% j $3800 by 1% k $440 by 15% l $150 by 33 13 %

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NSW
8-05 PAYG tax and net pay
Worksheet
To avoid paying income tax as a huge sum at the end of the financial year, tax is deducted from
Pay day
your gross pay every payday by your employer. This is called PAYG (Pay As You Go) tax. The
MAT09NAWK10094
total amount of PAYG tax paid over the year is usually more than the actual income tax payable,
so at the end of the financial year you will receive the difference as a tax refund. However, if the
PAYG tax paid is less than the income tax payable, you will have a tax debt and have to pay more.

Example 15
Weekly earnings ($) PAYG tax withheld ($)
184188 40
189192 41
193197 42
198201 43
202206 44
Employers use a PAYG tax table to determine how much tax to deduct from their
employees pays. Part of this table is shown above.
During his uni holidays, Li worked in a factory outlet store and earned $196 per week for
8 weeks.
a Calculate Lis gross income for the 8 weeks.
b How much PAYG tax was deducted from his pay over the 8 weeks?

Solution
a Gross income $196 3 8
$1568
In the table, $196 falls in the $193 $197 range.
Weekly PAYG tax $42
b Total PAYG tax $42 3 8
$336

Gross and net pay

Gross pay is the total amount a person earns or receives each payday.
Most income earners have a variety of deductions made against their gross pay before they receive
it, including PAYG tax, superannuation contributions, union fees and health fund payments. The
amount of income left after the deductions is called net pay.

Summary
Net pay gross pay  tax  other deductions

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Example 16
Paula earns a gross pay of $584.60 per fortnight. Her deductions are for PAYG tax, $38.60
for private health insurance and $54.90 for superannuation.
a Use the PAYG tax table to find Paulas PAYG tax per fortnight.

Fortnightly earnings ($) PAYG tax withheld ($)

576583 126
584593 128
594603 130
604611 132
612620 134

b Calculate Paulas net pay.

c What are Paulas total deductions as a percentage of her gross income (correct to one
decimal place)?

Solution
a In the table, $584.60 falls in the $584$593 range.
Fortnightly PAYG tax $128
b Net pay $584:60  $128  $38:60  $54:90
$363:10
c Total deductions $128 $38:60 $54:90
$221:50
$221:50
Deductions percentage 3 100%
$584:60
37:8891 . . . %
 37:9%

Exercise 8-05 PAYG tax and net pay

Use the table from Example 15 on page 304 when calculating PAYG tax in questions 1 to 7.
1 Xavier earned $195 per week for 16 weeks when he had a casual job as a childrens party See Example 15
clown.
a Calculate his gross income.
b How much PAYG tax was deducted from his pay in total?
2 Rose works part-time as a dental nurse. She is paid $206 per week and works for 42 weeks.
a Calculate Roses gross income over 42 weeks.
b Find the total amount she paid in PAYG tax.
3 Pushkara earned $186 per week over the summer holidays working at the local nursery. How
much did he pay in tax for the 6 weeks that he worked?

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Earning money

See Example 16 4 Rebecca is a music teacher who earns

$195 per week.
a How much tax will she pay per week?
b What percentage of her gross pay
will she pay in tax? Answer correct
to 1 decimal place.
c Calculate her net pay per week.

Alamy/ Ian Shaw

5 Calista paid $215 in tax for 5 weeks work at the local cinema. How much did she earn each
week?
6 Phoebe earns $201 per week while Jemima earns $191 per week. If they both work for
12 weeks in these jobs, who pays more in tax and by how much?
7 Huan wants to work during his school holidays over Christmas. He has been offered 2
different jobs for six weeks.
Cinema: Earn $368 per fortnight (fortnightly tax of $80)
Electronics store: Earn $190 per week
Over six weeks, which job offers the higher net pay? Show all working to justify your answer.
8 Mrs Gupta earns $598 per fortnight. She also pays $19.20 in union fees and $84.90 in
superannuation per fortnight.
a Use the table from Example 16 on page 305 to calculate how much PAYG tax she pays per
fortnight.
b Calculate Mrs Guptas fortnightly net pay.
c What percentage (correct to one decimal place) of her gross pay is made up of deductions?
9 Cooper has a gross income of $1125.86 per week. His deductions are $219.48 tax, $64.35 for
private health insurance and $30 for superannuation. Calculate Coopers:
a net income
b total deductions as a percentage of his gross income (correct to one decimal place).
10 Stefan earns a gross income of $864.25 per week. His deductions are $141.94 tax and $51.33
for private health insurance. Calculate:
a Stefans net income
b the percentage (correct to one decimal place) of Stefans gross income that is paid in tax.
11 Lina earns a salary of $76 800 p.a. Each fortnight she has deductions of $186.50 for family
health insurance and $65.12 for superannuation taken from her gross income. She also pays
tax at the rate of 21.6 cents in the dollar. Calculate:
a Linas fortnightly gross income
b the amount of tax Lina pays per fortnight
c Linas total deductions each fortnight
d Linas net income for the fortnight.

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12 Balun earns a salary of $128 900 p.a. Each month he has a deduction of $43.26 for union fees
and he pays $341.05 per month for health insurance taken from his gross income. He also pays
$36 432 tax for the year. Calculate:
a Baluns annual union fees
b his annual health insurance payments
c Baluns annual net income
d the percentage of Baluns gross income that is paid in tax (correct to one decimal place).
13 Copy and complete each pay slip.
a
Employee: Janice Hall Hourly pay rate: $16.80
Hours worked Deductions
Normal 38 Tax: $153.20 Other: $124.60
Time-and-a-half 0 Gross weekly income
Double time 0 Total deductions
Net weekly income

b Employee: Amber Menzies Hourly pay rate: $12.50

Hours worked Deductions
Normal 39 Tax: $167.80 Other: $229.10
Time-and-a-half 2 Gross weekly income
Double time 0 Total deductions
Net weekly income
14 Jodie earns a gross fortnightly pay of $1027.60. Apart from tax, she has the following
deductions: superannuation ($26.80), health insurance ($21.60), union fees ($5.20) and savings
plan ($65).
a If Jodies net fortnightly pay is $657.30, find how much tax is taken out.
b Express the tax she pays as a percentage of her gross income (correct to one decimal place).

Technology Online PAYG tax calculator

Visit the Australian Tax Office website www.ato.gov.au/taxtables to use the online PAYG tax
calculator or to download the PAYG tax tables. It contains the PAYG tax amounts for weekly,
fortnightly and monthly incomes. Find the PAYG tax payable and net pay for each of the
following gross pays.
a $505 weekly b $1466 fortnightly c $2730 monthly

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Power plus

1 In one year, professional golfer Greg Norman earned $48.5 million. How much is this
per minute? Assume 365 days in a year.
2 Danielle is paid $2500 per month. On average, how much does she earn in 4 hours,
if she works 9 hours per day, 5 days per week, for 48 weeks a year?
3 A fitness instructor conducts a class with 12 participants who pay $8 each. The class lasts
for 45 minutes. What is the instructors average hourly income?
4 Felicity and Rose have the same net pay. Felicity has $187.60 deducted from her
fortnightly gross pay of $514. Rose, who is paid weekly, has $64.20 deducted from her
gross pay each week. Calculate the difference between Felicitys and Roses gross
fortnightly pays.
5 Mirko earns $63 for working from 7:30 a.m. to 9:15 a.m. At this rate, how much will he
earn for a 38-hour week?
6 Anna earned $903 for working 36 hours at normal rates and 4 hours at time-and-a-half.
Find her hourly rate of pay.
7 When Barry works 6 hours overtime at time-and-a-half, his gross income increases by
$202.50. Find his weekly income for working 38 hours at normal rates.
8 One year, Robert received a holiday loading of $589.05, which was 17.5% of 4 weeks
pay. What was his normal weekly pay?
9 If Ingrid paid income tax of $34 493 last financial year, what was her taxable income?

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n Language of maths Puzzle sheet

Earning money
allowable deduction annual leave loading bonus commission crossword

deduction double time financial year fortnight MAT09NAPS10095

gross pay holiday loading income tax net pay Quiz

overtime PAYG tax per annum piecework Money and business

retainer salary taxable income time-and-a-half MAT09NAQZ00012

wage

1 What is the difference between a wage and a salary?

2 What is an allowable deduction? Give an example of one.
3 What earnings are calculated by 17.5% of four weeks of normal pay?
4 What earnings are calculated as a percentage of the value of items sold?
5 What does PAYG stand for?
6 What is a financial year?

n Topic overview
Write 10 questions (with solutions) that could be used in a test for this chapter
Swap your questions with another student and check their solutions against yours
Write down any part of this topic that you did not understand and discuss it with your teacher
Copy and complete this mind map of the topic, adding detail to its branches and using pictures,
symbols and colour where needed. Ask your teacher to check your work.

Worksheet
Overtime pay Mind map: Earning
money
Wages and salaries
MAT09NAWK10096
Commission,
piecework and
leave loading

EARNING
NG M
MONEY

PAYG tax and

net pay
Income tax

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See Exercise 8-01 1 Goran has an annual salary of $57 410. How much would he be paid:
a per week? b per fortnight? c per month?
See Exercise 8-01 2 Diane is paid $13.65 per hour and works a 37-hour week. Find her weekly wage.
See Exercise 8-02 3 Riley works 38 hours at $17.38 per hour and 5 hours overtime at time-and-a-half. Calculate
his total earnings.
See Exercise 8-02 4 Liam works at a warehouse under the following weekly award.

Award schedule: Normal rate is $15.75 per hour

Normal rate For 0 to 38 hours worked
Time-and-a-half For the next 3 hours worked
Double time For each hour worked after that
Calculate his wage for working:
a 40 hours b 44 hours.
See Exercise 8-03 5 Nicole is a bookseller who earns 4% commission on the value of books she sells. She also is
paid a monthly retainer of $900. If Nicoles sales for March were $82 500, find her total
income for March.
See Exercise 8-03 6 Sam is paid commission on a sliding scale of 3% on the first $50 000 of sales and 2.5% on all
sales after that. Calculate Sams income if he sells goods worth $80 000.
See Exercise 8-03 7 Calculate the piecework pay for:
a delivering 1500 pamphlets at 5 cents per pamphlet
b washing 47 cars at $17.50 per car
c laying 35 m2 of tiles at $28.50 per m2.
See Exercise 8-03 8 A jockey earns $100 per race ride and 5% of the value of prize money his horses win. Last
week Dan had 30 rides and his horses won prize money worth $172 500. How much did Dan
earn?
See Exercise 8-03 9 Sandra earns $876 per week and is about to begin her annual holidays. Along with her
4 weeks pay, she also receives a 17.5% annual holiday loading on the 4 weeks. Find Sandras
total holiday pay.
See Exercise 8-04 10 Emily is a department store manager who earned a gross salary last financial year of $141 542
and had the following allowable deductions: $378 uniform cleaning costs, $218 training
course costs and $1492 travel expenses. Calculate:
a Emilys taxable income
b the amount of income tax Emily should pay using the table on page 300.

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11 Nick earns $1492.44 per fortnight and pays PAYG tax, $33.15 for life insurance, $20.16 in See Exercise 8-05
union fees and $48.17 in superannuation.
a Use the PAYG table to find Nicks PAYG tax paid per fortnight.

Fortnightly earnings ($) PAYG tax withheld ($)

14701475 174
14761481 176
14821485 178
14861491 180
14921497 182
b Calculate Nicks fortnightly net pay.
c Calculate, correct to one decimal place, the percentage of Nicks gross pay that was paid
in tax.
12 For the pay slip below, calculate the: See Exercise 8-05

a gross income b total deductions c net income.

Employee: Blair OConnell Hourly pay rate: $22.80

Hours worked Deductions
Normal 37 Tax: $375.10 Other: $84.50
Time-and-a-half 4 Gross weekly income
Double time 2 Total deductions
Net weekly income

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